Jefferies continues to view Sanderson as overvalued, prefers Tyson. Jefferies analyst Akshay Jagdale expects chicken supply to increase ~3% in 2019 driven by incremental capacity, breeder flock expansion, and improved productivity. The analyst, in a research note titled "Don't Count Your Chickens Before They Hatch," says that although chicken demand has "seemingly improved" over the past month, he remains skeptical about its sustainability given the abundance of competing protein supplies expected again in 2019. Jagdale prefers to own diversified chicken processor Tyson Foods (TSN) "at this point in the cycle" and continues to believe Sanderson Farms (SAFM) is overvalued.

Sanderson Farms upgraded to Buy from Neutral at Mizuho. Mizuho analyst Jeremy Scott upgraded Sanderson Farms to Buy and raised his price target for the shares to $130 from $101. The future for the protein produces "has become notably brighter in the last three months," Scott tells investors in a research note. The analyst says that while the December/January quarter will be among the worst in the chicken market in the last five years, he believes "the bottom is in." He expects feature rotation, stronger overall protein exports, and a shallower than expected ramp in new chicken capacity to drive a "substantial improvement" in U.S. chicken margins over the next 12 months.

Sanderson Farms shares remain 'slightly expensive,' says JPMorgan. JPMorgan analyst Ken Goldman reiterates an Underweight rating on Sanderson Farms with an $88 price target following yesterday's Q4 results. Acceleration in chicken industry capacity growth over the next two years is not fully reflected in the stock price, Goldman tells investors in a research note. With debt likely to keep rising and no indication that any processor is cutting back on supply, the shares are "still slightly expensive," adds the analyst. He models an additional 9% decline in Sanderson Farms' book value over the next two years.

Reports Q4 revenue $798.1M, consensus $782.99M. Q4 EPS includes a charge of 32c per share net of income taxes, to record live inventories at the lower of cost or net realizable value as required by GAAP.

Sanderson Farms announced that it will discontinue by March 1, 2019, using antibiotics considered medically important for humans for disease prevention in its live poultry operations. The change follows the completion of an independent study the Company commissioned earlier this year on its antibiotics program for its live operations. As part of its ongoing animal welfare and antibiotic stewardship efforts, the Company commissioned an advisory board of scientific experts in poultry production, livestock management, and antibiotic use in veterinary and human medicine to study and report on the Company's use of antibiotics in its live poultry production operations. The advisory board found no misuse of antibiotics at Sanderson Farms or other deficiencies in its program. Instead, the advisory board found that compared to the rest of the industry, the Company's broiler chickens "have better than average health," and that "current management practices, including their use of antibiotics, are effective to preserve the health and life of chicks and birds." The advisory board also believes the number of broiler chickens treated with antibiotics for disease at Sanderson Farms in 2017 "is low relative to conventional operations of comparable size." Commenting on the advisory board's report, CEO Joe Sanderson said, "We are grateful for the work of the independent scientists who served on the advisory board, and we value their findings. As a result of their report, we have determined to discontinue by March 1, 2019, the use of gentamicin and virginiamycin for prevention of disease in our live operations. These are the only two antibiotics considered medically important for humans that we currently use for prevention purposes. Our live production team, including our team of veterinarians, is prepared to ensure this change has as little impact as possible on the health and welfare of our birds and environmental resources."